USD Trading Outlook
AUD/USD After giving up all the retail sales inspired gains Europe lifted the pair off the day's 0.8356 low. Profit taking had the pair near 0.8375 as NY got going. Early NY saw the lift gather pace as the USD went broadly offered on USD/JPY's drop from the 119.95 area. AUD/USD near 0.8400 but made a quick spike down near 0.8360 on a combination of EUR/AUD's lift from below 1.4660 towards 1.4780 and USD/JPY's rebound. AUD/USD's dip was bought though as the USD couldn't manage a serious rally. AUD/USD rallied and hit 0.8421. The USD clawed back some losses in NY's afternoon and this saw the pair slip lower and sit just above 0.8380 late in the day. Action in Asia is likely to be subdued as the market awaits the US jobs figures but the Oz Nov AiG PCI is due. A weak result may see AUD get hit as it will bolster the view that the Oz econ is struggling a bit. Bears are looking at 0.8315 as key s-t support for now.
AUD/USD The pair spent Europe's morning lifting off Asia's low. The move saw the pair rally from near 0.8390 towards 0.8420 into NY's open. EUR/AUD's break below 1.4700 and subsequent drop near 1.4605/10 aided AUD/USD's rise. NY added to the gains early on after ADP missed estimates and labor costs were a bit soft. A quick lift to 0.8447 ensued. Bears emerged though after USD/JPY bounced off hourly support near 119.20 and US bond yields added to recent gains. The pair then steadily descended for the remainder of NY and sat just above 0.8400 late in the day. Trader now look to Oz Oct retail sales & trade data for AUD cues. Below forecasts results will be more fodder for AUD bears after the GDP miss. AUD/USD likely would trade heavy again and make a run for key support near 0.8315.
AUD/USD The pair gave up all the gains made post-RBA. Europe shrugged off the statements as well as JPY weakness to instead focus on broad base USD strength. AUD/USD slid from above 0.8520 and sat near 0.8460 as NY got going. NY applied pressure early as the USD stayed firm on rising US bond yields. A low of 0.8432 was hit and then a bounce took hold after the latest Fonterra mil auction was weak. NZD's spike lower sent AUD/NZD rocketing up to the 1.0845 area. AUD/USD lifted towards 0.8465 but no further gains were possible as the USD held most of the day's gains. Late in the day AUD/USD sat just below 0.8445. Traders now turn their focus to Oz Q3 GDP and China services PMIs. Should the data results come in soft, AUD/USD is likely to test 0.8400. If it breaks we're likely to see a quick trip to the 0.8315 low from July 2010.
AUD/USD Europe couldn't add to losses after Asia set a new trend low for AUD/USD. The combination of a slumping USD and US yields along with rebounds in commodities had shorts scrambling to cover. The buys took the pair from near 0.8425 towards 0.8500 before it pulled back to the 0.8480 area into NY's open. NY bought the dip as early NY saw the USD and bond yields remain soft. The par rallied above 0.8520 but suffered a nice intra-day set-back after ISM beat estimates. A quick trip towards 0.8480 was seen but buyers were there again and the pair went on to hit 0.8533. The USD clawed back some losses late in the day and the pair sat just above 0.8510 late in the day. Traders now turn their focus to the RBA later. Rates are expected to stay unchanged but the statement might pressure AUD lower. AUD strength is likely to be mentioned again which is nothing new. However, if mentions of lowering rates, as RBA's Lowe recently noted, and intervention, as RBA's Kent recently noted, are brought up AUD should trade heavy. It's then possible today's short squeeze gets erased and new lows get set.
AUD/USD drifted up off the bottom after holding another run at Wednesday's .8480 lows, but remains a favorite target of the bears as commodity weakness spreads beyond oil. Metals and mining sectors got hammered, suggesting that behind the OPEC headlines there is a broader demand problem certain to hang around the neck of materials exporting countries. That easing moves by the PBOC, ECB and BOJ have had no impact on commodity prices has to be of some concern to the RBA, which may get its wish for a lower currency, but undoubtedly with some unpleasant and unintended consequences.
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